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The rate of inflation has shown signs of easing, following the highest spike in four decades. Yet the shock of rising prices continues to have an impact on consumers’ psyches. “The typical U.S. consumer is looking at the gas station or their grocery store and seeing prices elevated and not coming down anytime soon,” said Ataman Ozyildirim, senior director of economics at The Conference Board. The nonprofit think tank’s consumer confidence index declined in May amid “gloomy” expectations. Consumers’ perception of current employment conditions deteriorated the most, The Conference Board found, with those who said jobs are “plentiful” dropping to 43.5% from 47.5% in April. Meanwhile, expectations for inflation were stable, but still high, with inflation expected to average 6.1% over the next 12 months. “When anecdotally we ask consumers what’s your top concern on the economy, prices and inflation still come out as the top concern,” Ozyildirim said. A growing share of Americans — 61% — now say price increases have caused financial hardship for their households, according to Gallup, up 6 percentage points from November. For many consumers, the big question is how soon they may see financial relief. Borrowing costs, savings rates are higher The Federal Reserve is raising interest rates to combat the record spike in inflation. Consequently, borrowing costs are rising on auto loans, credit cards, mortgages and student debt. The caveat is that savers can now earn higher rates on their cash. The Fed’s process is like trying to slow the speed of a car, according to Laura Veldkamp, finance professor at Columbia Business School. When anecdotally, we ask consumers what’s your top concern on the economy, prices and inflation still come out as the top concern. Ataman Ozyildirim SENIOR DIRECTOR OF ECONOMICS AT THE CONFERENCE BOARD “What we’re doing right now is slowing the rate of inflation,” Veldkamp said. That means still driving the car forward, but slowly, she said. It does not mean trying to throw the car in reverse, which would prompt negative inflation. Negative inflation would be “pretty dangerous,” Veldkamp said, since it would remove price stability for what people can expect to pay in the future. This would make it more difficult to value forward-looking contracts such as rents or hiring, she noted. It would also lead to a collapse of demand, since decreasing prices take away the incentive to buy something today when it will likely be cheaper tomorrow, she said. Instead, the Federal Reserve is aiming to keep inflation off consumers’ radar screens. “Their job is to keep prices so stable that you don’t worry exactly what a dollar will be worth a year from now,” Veldkamp said. Prices not expected to drop ‘anytime soon’ The Federal Reserve’s goal is to bring inflation to a 2% target. However, the latest readings show the central bank still has room to go before reaching that goal. The annual inflation rate eased to 4.9% in April, per the consumer price index. The Fed’s preferred inflation measure — the personal consumption expenditures price index — was up 4.7% on an annual basis as of April. “The increase in prices is not expected to come down to the Fed’s 2% target rate anytime soon,” Ozyildirim said. Moreover, not every price will move in lockstep, as categories such as automobiles, homes and gasoline are subject to unique influences, such as supply chain bottlenecks, according to James Angel, associate professor at Georgetown University’s McDonough School of Business. “It’s not like suddenly tomorrow all the prices are going to go back to where they were in 2020,” Angel said. Inflation tends to create a “vicious circle” in the economy by prompting demand for higher wages, which then triggers higher manufacturing costs and therefore higher prices. When high inflation does subside to normal levels, it will do so quietly, he said. A 2% annual inflation rate will add up to more than 20% over a decade, Angel noted. “But from day to day, you don’t really notice it,” he said.

Economists have been predicting a recession for months, but the labor market has remained resilient, wage growth is higher than before the pandemic, and inflation continues to drop, now at 4% compared to 9.1% in June of last year. Despite this good news, consumers don’t feel confident about the future, according to the consumer confidence index, which is at a six-month low.

The consumer confidence index fell to 102.3 in May from 103.7 in April. The present situation index, which shows how consumers feel about current conditions in business and labor, dropped to 148.6 from 151.8, and the expectations index inched down to 71.5 from 71.7. According to the Conference Board, an economic research and business membership organization that releases the index, an expectations index below 80 is associated with a recession within the next year.  People aged 55 or older were especially pessimistic about the economy. The next consumer confidence survey results come out on June 27.

As we head into the summer months, temperatures may be going up across the United States—but consumer spending is going in the opposite direction. In fact, across all age and income groups, consumer spending is lower than it was a year ago.

Consumer confidence

Economists disagree about the timing of a U.S. downturn amid solid hiring and consum er spending, Moody’s said.

“Market consensus opinion is divided between a recession in the second half of this year or later in 2023 and into the first part of 2024, reflecting differing views on how long it would take for the economy to weaken given private consumption and labor market strength,” Moody’s said. “Enduring strength in the labor market could certainly delay the downturn to later this year.”

Despite surprising strength in employment and housing demand, the U.S. economy continues to decelerate and Federal Reserve tightening is likely to lead to a “modest recession” in the final three months of 2023, economists at Fannie Mae predict.

In a forecast released Monday, economists with Fannie Mae’s Economic and Strategic Research (ESR) Group said that it’s hard to say precisely when a recession will hit. But forecasters at the mortgage giant say by the time Fed policymakers see data showing inflation has cooled enough to bring rates back down, a recession will probably be unavoidable.

The U.S. is on track for its first genuine policy-led boom-bust cycle in four decades, induced by a significant increase in the money supply over 2020–21, unleashing high inflation and an aggressive policy response,” Deutsche Bank’s head of global economics and thematic research, Jim Reid, and chief economist, David Folkerts-Landau, wrote in a Monday research note. “The next stage is the U.S. recession that we were the first to forecast early last year.”

For more than a decade after the Global Financial Crisis, Fed officials sought to boost economic growth by holding interest rates near zero and instituting a policy called quantitative easing (QE)—where they would buy government bonds and mortgage-backed securities in order to increase the money supply and spur lending and investment in the economy. When the pandemic hit, they doubled down on these so-called “easy money” policies to help prevent an economic disaster. But Reid and Folkerts-Landau argue that this move set the U.S. up for a disastrous spell of inflation and a boom-bust cycle.

The U.S. will enter a downturn in the fourth quarter, followed by a “year of contraction and a European recession in 2024,” according to HSBC Asset Management.

In its midyear outlook, the British banking giant’s asset manager said recession warnings are “flashing red” for many economies, while fiscal and monetary policies are out of sync with stock and bond markets.

The conflict is a major blow to the global economy that will hurt growth and raise prices.

Beyond the suffering and humanitarian crisis from , the entire global economy will feel the effects of slower growth and faster inflation. Impacts will flow through three main channels. One, higher prices for commodities like food and energy will push up inflation further, in turn eroding the value of incomes and weighing on demand. Two, neighboring economies in particular will grapple with disrupted trade, supply chains, and remittances as well as an historic surge in refugee flows. And three, reduced business confidence and higher investor uncertainty will weigh on asset prices, tightening financial conditions and potentially spurring capital outflows from emerging markets.

The war has increased economic volatility. The US volatility index (VIX) and the economic policy uncertainty (EPU) index have both risen, though not nearly as much as in March 2020, at the onset of the COVID-19 pandemic. This is in line with earlier research findings that economic volatility is surprisingly low during war and periods of conflict, likely because a rise in government spending makes a slice of corporate profits easier to predict. Over time, this war may prove to be different, however, because of its effects on energy; volatility in energy sources and prices can produce dramatic effects throughout the global economy. On another measure, according to a  of , the war has introduced considerable volatility in the risks that business leaders see to economic growth. In our March 2022 poll, geopolitical risk displaced the pandemic and inflation as the biggest threat to growth.

The ongoing war in Ukraine has dimmed prospects of a post-pandemic economic recovery for emerging and developing economies in the  region, says the World Bank’s  for the region, released today.

Economic activity will remain deeply depressed through next year, with minimal growth of 0.3% expected in 2023, as energy price shocks continue to impact the region. So far, however, the region has weathered the storm of Russia’s invasion of Ukraine better than previously forecast. Regional output is now expected to contract by 0.2% this year, reflecting above expectation growth in some of the region’s largest economies and the prudent extension of pandemic-era stimulus programs by some governments.

In addition to tracking changes in current business conditions, such as actual monthly changes in output, order books, prices and employment, the PMI surveys compiled by S&P Global also include a subjective question which asks companies about their own output expectations for the coming year. This question reveals that Russia's invasion of Ukraine has hit business confidence across much of the world, representing a bigger jolt to worldwide business optimism than anything recorded over the last decade, with the sole exception being the onset of the pandemic.

Geopolitical instability, commodity price volatility and supply-chain disruptions all acted to dampen sentiment, particularly in Europe. This marks a big turnaround from the start of the year when firms were increasingly optimistic that the COVID-19 pandemic would be much less disruptive in 2022 than in the preceding two years.

Labor markets have been extremely tight over the last couple of years, and this is unlikely to change any time soon, given the demographic outlook. Total employment plus open vacancies – our measure for labor demand – are now significantly higher in Germany and the US than total labor supply (the workforce). Appcast and Totaljobs data show that the cost of recruiting in the US and the UK is still elevated as well as the time to fill open positions. The current economic slowdown might provide some relief, but the labor market of the future will be one of increasing worker shortage. It is fair to say that workers’ bargaining power in advanced economies declined for several decades between the 1980s and the financial crisis of 2008. Post-keynesian economists have emphasized how globalization and financialization of the economy caused a . The Great Recession plunged most advanced economies into a deep downturn and unemployment rates rose substantially. The weak labor market following the Great Recession also led to low wage growth, especially at the bottom of the income distribution. The post-Covid economic recovery is missing workers The Covid-19 pandemic that started in early 2020 led to fundamental changes in the economy and workers gained back some bargaining power. While the initial economic downturn was extremely severe in 2020, the labor market bounced back within a year. Economists have warned about the upcoming worker shortage in advanced economies for years. Charles Goodhart and Manoj Pradhan have written a book on and the implications for the labor market and inflation dynamics. They outline how ageing societies and worker scarcity will lead to higher wage growth in the future. They also argue that this will also lead to higher inflation down the road. Moreover, the burden on the health care system and pension system will increase as the share of the older population is rising rapidly. The literature on suggests that these demographic trends have affected advanced economies in various ways. The increase in life expectancy is leading to excess savings, which has decreased real interest rates around the globe. This, in turn, has also led to a house price boom. With higher longevity, increasing the retirement age would be one way to overcome the challenges of missing workers and the widening gap that is opening up in national pension systems. that a mix of measures will be necessary to handle the looming era of people shortage in advanced economies. Measures need to focus on the productivity of work as well as on higher labor force participation. suggest that many European countries will soon face a similar population dynamic. Germany and Eastern Europe in particular, have falling fertility rates that have been below the population replacement rate for decades. The worker shortage is increasingly hitting the labor market, especially as the demand for workers has recently increased with the post-Covid economic recovery while the supply of workers has stagnated. The following three charts exemplify to what extent the labor market is out of balance in the US, Germany, and the UK. And the problem will only exacerbate due to the long-term demographic outlook. Labor supply is measured by the labor force – all workers who are currently in work or actively looking for work – meaning the sum of all employed and unemployed people in the economy. The demand for labor is total employment plus all open vacancies (unfilled positions) in the economy. The two lines thus show to what extent demand is outstripping supply right now as the economy runs hot. USA After almost a decade of slack following the sluggish recovery post-2008, the US labor market finally reached full employment just before the pandemic. Our chart shows how labor demand already outstripped labor supply in 2018 and 2019. This was mostly driven by monetary policy with the Powell Fed aiming for a . The US unemployment rate already hit a record-low back in 2019. Immigration to the US also declined at the time, thus adding to the existing labor market tightness. While the Covid economic shock led to massive temporary layoffs during the initial lockdowns, the US labor market bounced back within a year and the economy ran hot in 2021. In fact, over the last two years labor demand has surged way above labor supply as total vacancies in the economy reached a record-high and outnumbered the unemployed. Moreover, the very large cohort of baby boomers is about to retire in the coming years and the Covid pandemic sped up the . Some of this was probably related to health reasons, but changes in wealth also played a role. suggests that surging house and stock prices can account for some of the increased retirement, too. Even though the economy is currently cooling down somewhat as the Fed is tightening, the labor market continues unabated with more than , respectively. The outlook remains challenging for recruiters and may not normalize anytime soon. The current job market is very much a continuation of the tight labor market boom from before the pandemic when the unemployment rate fell below 4%. Data from Appcast shows how the median cost per application has increased significantly, from about 20 dollars in early 2021 to over 30 dollars in early 2022. Recruitment costs surged throughout 2021 and have remained elevated ever since. This shows to what extent the labor market of today is favoring workers even as the Fed is trying to cool down the economy with interest rate hikes. Germany The situation in Germany very much mirrors the one in the US. Germany’s demographic headwinds are more severe than those of the UK or the US since German fertility rates have been below the replacement level for decades. Following the financial crisis, Germany has been one of the faster-growing economies in Europe with a relatively high share of manufactured goods. The export-led growth model has coincided with a shortage of skilled workers. According to a , more than 60% of companies said back in 2019 that they lack productivity because of open positions. The dearth of workers was thus already a constraint on growth for many years. Just before the pandemic, our estimate for total labor demand outstripped supply for the very first time in 2018. The situation briefly reversed as the Covid shock in 2020 and 2021 with various lockdowns slowed down the economy. However, as of the end of 2022, total demand exceeded total supply by almost one million workers. In fact, total employment in Germany only declined slightly during the pandemic and is now exceeding its pre-pandemic level by more than one million workers. At the same time, job openings are also at a record high, suggesting that the lack of workers is holding the economy back. While the energy price shock is hurting the German economy in the short-run, long-run demographics are significantly worse than in the US. We thus expect the demand for workers to outstrip supply in the future and absent a very large inflow of skilled workers from abroad, there will be little relief in sight. As the German population is ageing rapidly, the German labor force has started to decline. The country will reach “peak employment” in this decade as the pool of workers is shrinking. UK The UK economy is currently struggling more than the US and Germany as Brexit is an additional negative economic shock on top of the energy crisis and supply chains problems due to Covid. However, more recent forecasts suggest that the and JP Morgan recently forecasted that there might be no contraction at all because . Despite the more challenging short-term economic outlook, the UK economy has also seen a continuous narrowing between our two measures for labor demand and labor supply. We can see the same picture is emerging as in the US and Germany with the demand for workers increasing while the supply of workers is stagnating. In a recent , I outlined how the Corona pandemic has created additional challenges for the UK labor market with more than half a million workers dropping out of the workforce due to long-run health issues. The UK labor market has thus also tightened dramatically over the last few years, especially as Brexit has led to a and other manual workers. One bright spot is that the UK is ironically adding more foreign workers now than before Brexit, mostly from non-European countries. With Britain remaining one of the most popular destination countries in the world for immigrants, domestic employers are seeking to hire more globally to solve the worker shortage. The shows that the recruitment outlook remains challenging for now. The average time to hire increased by almost 3 weeks between Q4 2021 and Q2 2022, showing labor market tightness across all sectors in the UK. Employers are still struggling to fill many positions even as the average time to hire declined somewhat by the end of last year. On the bright side, elevated demand for workers shows that the UK economy is not performing as badly as many forecasters suggested just a few months ago. Conclusion The worker shortage is a problem that has loomed for many years. And it is currently holding back the economic recovery following the Covid downturn. With societies ageing rapidly, the need for new solutions will become even greater in coming decades. Our charts show how the demand for workers is outstripping the supply for workers by a wide margin in the US and Germany. And even for the UK, the gap between the two has never been closer. Japan has been in many ways a precursor to what Europe should expect in the coming decades. The Japanese population peaked at a little under 130 million in the early 2000s and is expected to decline to 100 million by 2050 as a result of low fertility rates. This is already affecting the economy in various ways. Many rural communities have seen their population decline tremendously and the Japanese government is actually making an effort to as to save on infrastructure spending in the depopulated areas. The dependency ratio – the number of retired workers to the active population – has been going up for many years with obvious implications for the pension system. While technology and productivity gains can compensate – Japan is one of the most “robotized” nations on earth where even – technology might not be able to overcome every single problem that is resulting from missing workers. This is precisely why the long-run prospects for countries who are betting on immigration – Australia, Canada, the US, and the UK – is better than for those who are more closed off to foreign workers. For companies, these developments are certainly challenging, and recruiters should not waste too much time because the current labor market tightness will not be resolved any time soon. However, this environment is also an opportunity. Employers that have a clear people strategy that focuses on workers can stand out from the crowd and outperform the competition. Offering individually agreed, flexible working conditions, an attractive company culture and, also, a clear purpose can be attractive for employees. Especially women with younger children are too often discouraged to join the labor force. This is particularly , which has some of the highest childcare costs in the world. Additionally, there needs to be a focus on hiring globally. While the US and the UK have more of a history of being a migration destination and English-speaking, Germany does not need to feel left behind. The country has some of the top universities in Europe. It is also one of the largest global economies and has high living standards. With the upcoming worker shortage, German employers would do well to recruit more globally and attract talent from abroad.

More than half of small business owners representing numerous industries say the skilled labor shortage is hampering their operations, according to the Small Business and Entrepreneurship Council’s (SBE) newly released checkup survey. It found that 55% of business owners strongly agreed that the skilled worker shortfall is limiting their capacity, while another 9% of respondents agreed with the sentiment. Conversely, 42% said the labor shortage was not holding their operations back. According to the study, accessing talent is the most significant problem in staffing. It found: 42% of businesses have a hard time finding the right hire; 29% are struggling to offer adequate compensation packages to attract the right talent; 28% face issues with employee retention; and 25% have a hard time competing with large companies for job candidates. This is no surprise to collision shop owners, who have struggled to hire and retain technicians amid a longtime staffing shortage. A number of efforts are underway to change that, including mentorship and apprenticeship programs. That’s not the only challenge they’re facing, with inflation and difficulty securing credit also eating into bottom lines, SBE noted. “Small businesses are often referred to as the backbone of the economy because they provide employment opportunities, drive innovation, and contribute significantly to the country’s gross domestic product,” the report said. “However, despite their importance, small businesses face numerous challenges that can impede their growth and survival. “Inflation, recession, and economic uncertainty are some of the top economic challenges that small businesses face. Rising interest rates, energy prices, and labor shortages also negatively impact their operations and bottom line.” The survey found that 54% of small businesses are being affected by the credit squeeze, with nearly one-fifth of business owners saying that credit is “much harder” to secure than it was before. A financial expert recently highlighted the ways small businesses can overcome challenges related to securing capital or credit. Marius Silvasan, CEO of financial technology startup eCapital, offered three tips that could be helpful in riding out the crisis. In an interview with Fox News, he said small businesses should: Be familiar with their lender. “There are many factors to consider when evaluating your current, or any potential lender, including strong customer service, referrals from trusted sources, overall size, experience, financial strength, stability, and reliability,” Silvasan said. Diversify their options. “If you’re concerned about your bank scaling down your line of credit, don’t wait for your bank to send you notice. Look for an alternative lender now,” he said. Cut spending and ensure working capital. According to the study, some businesses are already heeding some of that advice. It found 32% of businesses are cutting back on big-ticket items such as equipment or technology. Others are trimming back on travel, marketing, and new hires. Overall, about 57% of businesses said they were cutting back on expenses. The survey also dipped into politics, asking respondents if they were satisfied with President Joe Biden’s performance. More than half of businesses, who were surveyed in April, said they believed Biden was doing a poor job, and 56% deemed his handling of the economy “unacceptable.” Biden has touted a small business boom, saying in January that his “first two years in office have been the two greatest years for new small business applications on record, with more than 10 million total new businesses created.” “It’s the latest confirmation that my economic plan is working to build our economy from the bottom up and middle out,” Biden said in a statement. “With unemployment at a record low and the two strongest years of job creation in our history, there are reasons for economic optimism all across our country.” Karen Kerrigan, SBE’s chief executive, said the survey’s finding shows that the Biden administration’s policies are hurting small businesses, “President Biden touts the record level of new business applications during his tenure, which actually accelerated during the early months of the pandemic, but these applications are just that – intentions to start a business,” Kerrigan said. “Uncertain economic conditions, limited access to capital and labor, and relentless inflation will hold back many of these potential entrepreneurs. “This is very sad for our economy and the dreams of these individuals. The ‘entrepreneurial boom’ is an opportunity that could be lost due to poor economic policies.” It’s not all doom and gloom, she noted. The survey found that most business owners believe they can weather the coming uncertainty, with 68% saying they’re optimistic about their survival over the next two years.

What Causes Supply Chain Disruptions? Supply chains are complicated and interconnected systems, and disruptions to them can cause serious problems. Disruptions can range from minor glitches to major catastrophes that can cost businesses millions of dollars. Understanding the causes of supply chain disruptions can help businesses take steps to minimize the impact of such events. Natural Disasters Natural disasters like hurricanes, earthquakes, and floods can have a devastating impact on supply chains. These events can reduce the availability of raw materials, slow down transportation, and disrupt communication networks. Political Instability Political instability in certain parts of the world can lead to supply chain disruptions. Trade sanctions and tariffs, as well as civil unrest, can all have an impact on the ability of businesses to get the materials they need to fulfill orders. Economic Shifts Economic shifts can also lead to supply chain disruptions. A recession or economic downturn can lead to reduced demand and cause businesses to scale back their operations. This can lead to supply chain disruptions as suppliers may not be able to meet the reduced demand. Technology Failures Technology is an integral part of many supply chains. If there is a technology failure, it can cause significant disruptions. This can range from a computer system crash to a security breach that compromises sensitive information. Human Error Human error is another common cause of supply chain disruptions. This can include an employee making a mistake in an order or data entry or a supplier making an error in their shipment. By understanding the causes of supply chain disruptions, businesses can take steps to minimize their impact. This can include investing in redundancies and backup systems, developing plans for dealing with crises, and diversifying supply chains. By taking proactive steps, businesses can protect themselves from the negative impacts of supply chain disruptions. What is the Impact of Supply Chain Disruptions? The modern global economy is highly interconnected and reliant on the smooth functioning of supply chains. Unfortunately, disruptions in supply chains are becoming increasingly commonplace, and their impact is far-reaching and costly. Disruptions can take a variety of forms, such as natural disasters, political instability, and customer demand changes. Regardless of the cause, supply chain disruptions can have a significant impact on businesses, their customers, and the economy as a whole. The direct impact of supply chain disruptions is felt most heavily in terms of lost sales and profits. When supply chains are disrupted, businesses can’t deliver their products or services to customers in a timely manner. This often results in lost sales, missed opportunities, and a decrease in customer satisfaction. In addition, supply chain disruptions can lead to increased production costs, additional storage costs, and higher shipping costs. All of these can have a significant impact on the bottom line. The indirect impact of supply chain disruptions can be even more costly. When supply chains are disrupted, businesses often have to scramble to make alternative arrangements for the delivery of their products and services. This can lead to delays in production, a decrease in quality, and a decrease in customer satisfaction. Furthermore, supply chain disruptions can damage a company’s reputation and jeopardize customer loyalty. Finally, supply chain disruptions can have an impact on the economy as a whole. When businesses are unable to deliver their products and services on time, it can lead to a decrease in consumer spending. This decrease can lead to an overall decrease in economic activity. In conclusion, supply chain disruptions can have a significant impact on businesses, their customers, and the economy as a whole. Businesses must be prepared to respond quickly and effectively to any supply chain disruptions they may face. It’s also important to understand the potential economic impacts of such disruptions, so that businesses can develop strategies to minimize their impact.

The continuing double-whammy of supply chain breaks and too few people to fill jobs has diminished confidence among business owners and managers, according to a recent Harris Poll. The poll, commissioned by Oklahoma City-based Express Employment Professionals, concluded that a month into the first quarter of 2022, many companies remain mired in uncertainties over whether critical supplies will arrive on time or at all. That’s affected decision-making when it comes to hiring new workers to fill orders that may or may not be able to be filled, and ultimately to business confidence looking forward. Six out of 10 business decision-makers polled in the U.S. responded that their companies have had to alter plans, including for hiring, because of the national supply chain issues. They also said delays had already negatively affected potentials for growth. Even as supply chain uncertainties create challenges day to day, managers reported they’re also dealing with issues related to too few people filling critical roles in production and other areas. About a third said they had hired or attempted to hire people specifically to fill logistics/supply chain positions. Well more than half said their companies had relaxed hiring requirements for filling other jobs. Midsized companies with 100-499 employees were found most likely to be facing supply chain issues. In the hard-hit manufacturing industry, 74% of hiring managers said companies have had to alter hiring practices because of national supply chain issue. In the service industry sector, 71% reported making similar adjustments. “Every company we talk with says that hiring, retaining and supply chain are the top three challenges they are facing,” said David Robb, an Express franchise co-owner/managing partner in Grand Rapids, Michigan. “Companies are desperate to hire people, but sometimes due to supplies, they can’t give people enough hours or hire the few people that are available as quickly as possible. This can hurt retention, and ultimately company growth when they need it the most.” Robb added that supply chain issues seem consistent across a wide variety of industries. Mike Brady, an Express franchise owner in Jacksonville, Florida, said issues are affecting industry production as well as the nation’s widely reported recent struggles with inflation. “The Christmas rush is over, but the demand for goods and the shortages in some areas is still going on,” he said. “We have a broken supply chain system with the high cost of containers and goods driving up demand and consumer prices. But some companies cannot pass along the higher costs of goods and wages, so they are producing less.”

“Overall, small business owners are expressing concerns for future business conditions,” said Bill Dunkelberg, NFIB Chief Economist. “Supply chain disruptions and labor shortages will continue to limit the ability of many small firms to meet the demand for their products and services, while less severe than last year’s experience.” [Graph Omitted] NFIB Optimism components The first chart below highlights the 1986 baseline level of 100 and includes some labels to help us visualize that dramatic change in small-business sentiment that accompanied the Great Financial Crisis and now the COVID-19 pandemic. Compare, for example, the relative resilience of the index during the 2000-2003 collapse of the Tech Bubble with the far weaker readings following the Great Recession that ended in June 2009. A similar pattern happened beginning in 2019 and dropped drastically during the COVID-19 pandemic. Even after the bounce back, readings continue to drop.

US small-business sentiment in May held close to the lowest level in a decade on dimmer views about the outlook for sales, the economy and credit conditions.

The National Federation of Independent Business optimism index ticked up to 89.4 from an April reading of 89 that was the weakest since January 2013, the group said Tuesday.

Optimism among small business owners fell below a 49-year average in March as inflation, tighter credit conditions and difficulty finding workers weighed on outlook.

The National Federation of Independent Business' (NFIB) optimism index fell to 90.1 last month from 90.9 in February, the group said in a report Tuesday.

Business confidence among the state’s employers fell last month to the lowest level seen since the height of the pandemic, according to a recent survey of Massachusetts employers.

The , in its monthly Business Confidence Index, says Massachusetts business owners’ faith in the economy plunged half-a-point in May, dropping from 50.1% to 49.6% and continuing a downward trend that first began in November.

Small-business confidence hit a  in April, and while May brought a slight rebound, their outlook remains far from rosy.  

For the 17th straight month, the Small Business Optimism Index fell below the nearly 50-year average, according to the National Federation of Independent Business's . The index increased from 89 in April to 89.4 in May--higher than The Wall Street Journal's , based on a poll of economists.